Republicans Fussing With Unworkable Unemployment Plan As Benefits Lapse

Senate Republicans on Monday are set to unveil their long-awaited proposal for another coronavirus economic stimulus package, including some kind of extension of enhanced unemployment benefits that are set to expire this week for millions of Americans.

Based on Republicans’ descriptions of their plan, a trade association for state unemployment agencies has already said it would be an implementation nightmare with wildly different results among states.

The $1 trillion measure is supposed to be a starting point for negotiations with top congressional Democrats. But already it has divided the GOP and faces stiff opposition from conservatives. It includes another round of stimulus checks, similar to those paid out earlier this year, as well as aid to schools and smaller businesses, and expanded liability protections.

The Republican proposal will replace the extra $600 in federal unemployment benefits that Congress created in March with an individualized amount based on workers’ previous wages, White House chief of staff Mark Meadows said Sunday.  

“We are going to be prepared on Monday to provide unemployment insurance extension that would be 70% of whatever the wages you were prior to being unemployed,” Meadows said on ABCNews’ “This Week with George Stephanopoulos.” 

But there could be a huge problem with structuring the proposal like that if Republicans want the extra $600 replaced immediately. It would take at least a month for states to set the extra benefits according to individual wages, the National Association of State Workforce Agencies said. For some states, it could take longer than 12 weeks. 

“If such a policy solution is chosen, the effective date should be set well in the future, with a continuation of a flat amount until that future effective date,” the trade association said in a document offering guidance to lawmakers. It’s not clear if the Republican proposal would call for an immediate transition or a later starting point, perhaps with a smaller flat amount in the meantime. (Even changing the amount could take as long as five weeks in some states, according to the association.) 

It’s no surprise that state unemployment agencies would struggle with a new policy. After all, it took weeks and in some cases months for states to implement the changes Congress enacted in March. Several unemployed workers have told HuffPost they still can’t get anyone on the phone when they have a problem with their claim. 

Meadows said the U.S. Labor Department would get help from the Treasury Department, which managed to distribute more than 159 million direct payments to households earlier this summer. But the National Association of State Workforce Agencies said involving Treasury would create “many administrative issues” and it would be faster to tell states to maintain a flat benefit amount. 

Meanwhile, more than 25 million Americans receiving benefits got their final payments with the extra $600 over the weekend. Next week, they will receive only the state portion of their benefits, which typically amounts to less than $400. That income loss could have a substantial effect on the broader economy. 

Kevin Menard of Gladstone, Michigan, said he and his spouse are “breaking even” thanks to the extra $600. He receives less than he did from his job as a corporate travel agent, but enough to pay his bills. Without the extra money, he will have to prioritize his mortgage and figure out which obligations have to slide. 

“Somebody’s not going to get paid. I’ve always been on time with everything.” Menard, 52, said in an interview. “I’m seriously going to have those conversations and I’ve never been in this situation my entire life. I’ve never not had a job since high school.”

Republicans have complained the extra $600 discourages people from taking jobs, even though the pandemic is surging and public health experts say staying home is still the country’s best medicine. Menard said that he wouldn’t feel safe trying to strike up a new career and that he’s still technically employed at his old job, on furlough until October. 

House Democrats passed their own $3 trillion measure in May. Among its relief provisions, the bill would fully extend the added unemployment benefits until the end of this year. Republicans, however, decided on a wait-and-see approach to further coronavirus aid, declining to act until just a few weeks before the July 31 deadline. 

“The simple, easiest thing to do is extend it,” Senate Minority Leader Chuck Schumer (D-N.Y.) said Monday on MSNBC’s “Morning Joe.” “It’s been one of the most successful programs at keeping people out of poverty, getting money into the economy quickly. Had we not done it, we’d probably be in a depression. If we don’t do it again we could go into a depression, as bad as this recession is.”

Democrats will have leverage over the final product, and their support is necessary to send the legislation to the president’s desk. Half the Senate Republican conference is currently opposed to passing any additional stimulus, Sen. Lindsey Graham (R-S.C.) said Sunday on Fox News.

“It’s just shoveling money to her friends and not actually solving the problem,” Sen. Ted Cruz (R-Texas) said of House Speaker Nancy Pelosi in a separate Sunday interview on CBS.

White House officials on Sunday floated an alternative proposal before the broader package had even been unveiled, something that doesn’t bode well for this week’s expected round of negotiations. The more narrow package would include only a partial extension of the enhanced unemployment benefits, along with some funding for schools, and expanded liability protections for businesses. 

But Pelosi has repeatedly rejected that approach.

“We have stood ready to negotiate for more than two months,“Pelosi said in a statement Monday, calling on Republican leaders to meet with her and Schumer within a half-hour of releasing their plan today. “If Republicans care about working families, this won’t take long. Time is running out. Congress cannot go home without an agreement.”